Low savings rates in the economic community of west African states (Ecowas): the role of corruption

Although many empirical studies have been conducted on the determinants of savings,little has been done to examine the effect of corruption on savings,particularly in the ecowas region. this study employs ols and tsls-instrumental variable techniques that take into account random effects to investigate the effect of corruption on savings,in addition to examining whether the effect of corruption on savings depends on income levels in the ecowas from 1996 to 2012. the results illustrate that lower corruption is associated with higher savings,and the effect of corruption on savings decreases with income level. the results suggest that governments in ecowas should employ effective policies that will reduce corruption to raise savings,and raise incomes to reduce the negative effect of corruption on savings. © 2015,statistical economic and social research. all rights reserved.